SMTC closes CDN$40.0 Million private placement

SMTC Manufacturing Corporation of Canada ("SMTC Canada") (NASDAQ:SMTX; TSX:SMX) announced that it has closed its previously announced underwritten private placement of 33,350,000 Special Warrants to qualified investors at a price of CDN$1.20 per Special Warrant, representing an aggregate amount of issue of CDN$40,020,000 (approximately US$30,000,000 at current exchange rates.) The financing was underwritten by a syndicate of Canadian investment dealers. Each Special Warrant is exercisable into one unit consisting of one exchangeable share of SMTC Canada, and one half of a warrant to purchase an exchangeable share. Each whole warrant will be exercisable into one exchangeable share of SMTC Canada at an exercise price of CDN$1.85 (approximately US$1.38 at current exchange rates) per share for a period of 60 months following the closing of the offering. Subject to satisfaction of applicable legal requirements, each exchangeable share can be exchanged on a one-for-one basis for one common share of SMTC Corporation (U.S. incorporated) (SMTX:Nasdaq). SMTC Canada is an indirect, wholly-owned subsidiary of SMTC Corporation. The net proceeds from the Offering are being held in escrow pending receipt of shareholder approval and, upon release from escrow, will be used for debt reduction, as part of a concurrent agreement with SMTC's lenders, and working capital. The Special Warrants will be exerciseable for units on the earlier of: (i) the sixth business day after the date on which a receipt has been issued by applicable Canadian securities regulatory authorities for a final prospectus qualifying the distribution of the exchangeable shares and warrants issuable upon exercise of the Special Warrants (the "Prospectus Qualification Date"), and (ii) the first business day following the date that is 12 months following the closing date. If the Prospectus Qualification Date has not occurred on or before the date that is 90 days following the closing date or if SMTC Corporation has not, within 120 days of the closing date, registered in the United States the common stock underlying the exchangeable shares issuable in connection with the offering, each Special Warrant shall thereafter entitle the holder to receive upon exercise, without payment of additional consideration, 1.1 units, in lieu of, one unit. The transaction is subject to the receipt of all necessary shareholder, regulatory and stock exchange approvals and other customary conditions. Shareholder approval is intended to be sought, on a best efforts basis, within the next 60 days, but in any event no later than 90 days.Source: PCBnewsline